US researcher IMS says that 2009 was a bit of a crash for consumer electronics, with sales falling 5% to just $375 billion. We would have thought that sales would have fallen way below this, but then again there are some markets which were opening up, such as India and China and this may have counteracted a bigger fall elsewhere.
IMS is now predicting relatively strong growth in CE, led by smart phones, portable media players, set-tops, LCD TVs and refrigeration appliances for 2010, which will take CE revenues up to $406 billion and for the three years 2010, 11 and 12 will total more than $1.3 trillion.
Shane Walker, IMS Research’s Consumer Electronics Group Manager, states, ‘In addition to typical CE devices such as TV sets, set-top boxes, digital cameras, smartphones and netbooks, we are expecting to see increased revenue for the CE industry in major home appliances and telehealth, not to mention the nascent connected tablet market.
IMS also said that refrigeration units and air-conditioners will account for 60% of major home appliance revenue and 19% of overall CE revenue.
We have to say that this assumes no more grenades like the credit crunch or any dramatic price or demand falls in established areas, and we can’t really see companies which rely on the CE sector like Sony, Toshiba and Samsung faring too well during this period, they certainly won’t all have 8% revenue hikes. There is downward pricing pressure on smartphones, on TVs and on PCs and projecting growth in excess of 8%, across the board sounds optimistic, but then again we come back to the emergence of China and India as consumer markets, we suppose.
The finding, for instance, that digital cameras, which fell by 5% in 2009, will rise in both 2011 and 2012 concerns us. There are new entries (such as Samsung) into this market which could lead to over production and a price crash. But IMS reckons this will hold off until 2013 when revenues for digital cameras will decline slightly over falling average prices.
We can remember back 30 years to when research companies forecast that stand alone Word Processors would have a bumper year, and then the PC promptly wiped them out, and surely this must start to happen on digital cameras, as the smart phone and other portable devices begin to take its place, and tens of megapixels, and more sophisticated zoom functions will come into the phone market.
It’s the same for portable navigation device, which IMS says will grow in India and South America, due to improvements in accurate up-to-date mapping. But surely that mapping is coming from companies like Nokia’s Navteq and the fact that it is giving away the functions on a phone mean that this market will be undermined in both volumes and price, as it shifts to phones.
We have seen IMS predictions in the past and they are professionally produced even if they just look like page after page of numbers, without the backup logic to explain how they were reached. But we’re also not really sure why anyone would want to predict fridges and air conditioning alongside digital picture frames. Putting them together surely gives a wrong skew to the findings.
If you just have to have this report it’s called the Consumer Electronics Yearbook, and IMS says it analyses 40 product types from portable consumer devices, active speaker systems, PMP docking stations, digital picture frames, home theater systems, televisions, appliances and home medical equipment. But to us it seems to take a rose tinted view of things.